Puerto Rico: The budget, and the statehood proposal in #superpowernation

While the trend in the 50 US states is bigger government, more government jobs and more spending, Luis Fortuño, Puerto Rico’s governor, is making big strides in bringing the island’s economy to a more competitive standing.

Puerto Rico’s government is preparing public-private partnerships to jump-start the island’s stalled economy and wants several of the big-ticket deals in place by year’s end.

Governor Luis Fortuno has in 15 months in office eliminated thousands of government jobs, put in place multibillion-dollar cuts in expenditures and pledged to eliminate the big municipal debt issuer’s persistent budget deficits.

His administration’s partnership initiatives are meant to lure outside investment to a Caribbean economy in recession since 2006 and come as the pace of global infrastructure deals between governments and businesses quickens.

Why the initiatives?

In Puerto Rico, a U.S. commonwealth with big debts, chronically severe unemployment now at a 15.9 percent rate and per capita income half that of mainland America, officials are readying requests for qualifications for eight partnership projects.

There’s a new Public Private Partnership Authority, which is working on deals to privatize

the Luis Munoz Marin Airport in Isla Verde

a $1.4 billion school modernization program

Highway 22

and other proposals are in the works.

A different kind of proposal is also in the works: Puerto Rico’s Resident Commissioner in Congress, Pedro Pierlusi (D-PR), has introduced the Puerto Rican Democracy Act. The bill would provide for a referendum on Puerto Rico’s status, and it’s endorsed by governor Fortuño but it’s problematic. As Tim Schultz explains another point to consider on the bill, that of language,

The foreignness of English in Puerto Rico is greater in magnitude than it was in any state at any time in our national experience. Census data show that just 20 percent of the island’s residents speak English fluently. By comparison, California has the lowest proficiency rate among the 50 states, but its 80 percent proficiency rate dwarfs Puerto Rico’s. The deeply rooted preference for Spanish makes Puerto Rico’s 1993 elevation of English to “co-official” status practically irrelevant. Authentic “official English” policies increase English learning, but they will not work when English is merely an add-on to a pre-existing official language that is spoken in 95 percent of homes. Congress should condition statehood on making English the sole official language, which would still allow Spanish translations for a population in transition while insisting on acceptance of the lingua franca of the Union.

I would add another issue: Now that governor Fortuño is trying to set the island on the right track to prosperity, is it appropriate to spend millions of dollars on the referendum process – something already done several times during my lifetime – which will be repeated again, according to the bill?

Diageo, a British liquor conglomerate that owns the popular spiced-rum brand, was lured to the Virgin Islands by $2.7 billion in rebates over 30 years on the taxes that mainland residents pay every time they buy a bottle of rum. The company also will get a new $165 million distillery and a 90 percent income-tax break.